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Adam N. Michel

Last night, eight Republican presidential hopefuls faced one another on stage to vie for primary voters’ support. The debaters discussed the economy, foreign policy, education, crime, abortion, and climate change. Despite a few passing mentions, tax policy was almost entirely absent.

This absence is notable, as the next president will have an unprecedented opportunity to build on the success of the 2017 Tax Cuts and Jobs Act. Without Congressional action, the 2017 law will expire, and taxes will automatically increase for virtually every American at the end of 2025.

The 2017 tax cuts made historic reforms to the tax code. The next president and Congress must think critically about what additional improvements can be made. The U.S. fiscal situation has also changed dramatically. Fueled by higher spending, deficits continue to climb despite federal tax revenue as a percent of the economy reached a two‐​decade high last year (and is projected to remain above the historical average).

What follows is a brief guide for those Americans who may need to remember the specifics of the 2017 reforms or need to begin thinking about what should be done in 2025.

What was in the 2017 tax cuts?

In addition to cutting individual tax rates, the reforms made it easier for millions of Americans to pay their taxes, simplified family benefits, and reduced some special interest tax subsidies, among many other reforms. The law also cut the corporate income tax rate from the highest rate in the developed world to about average (this is the primary permanent tax cut) and made other significant business tax changes. As a result, the law boosted economic growth, investment, wages, and jobs.

Some of the most significant changes that expire in 2025 include:

Lower individual income tax rates and thresholds. More than nine out of 10 taxpayers received a tax cut or saw no change in their tax bill. According to estimates at the time, only 4.8 percent of taxpayers were projected to see a tax increase, and more than 80 percent of taxpayers benefited from a tax cut.
Nearly doubled standard deductions of $12,000 for single filers and $24,000 for married couples filing jointly in 2018. Doubling the standard deduction and curtailing the value of some itemized deductions moved more than 29 million taxpayers from the more complicated itemized system to the standard deduction.
New $10,000 cap on the state and local tax (SALT) deduction and a $250,000 reduction (to $750,000) to the cap on the mortgage interest deduction for new mortgages. The phase‐​out of itemized deductions (Pease limitation) and other smaller itemized deductions were eliminated.
Doubled child tax credit to $2,000 and increased the phase‐​out threshold. The refundable portion of the credit increased, a new $500 non‐​child dependent credit was added, and the personal and dependent exemptions were repealed.
Reduced number of families who must pay the estate tax and the individual alternative minimum tax (AMT).
Full immediate deduction (expensing) for business investments in equipment and machinery.
New 20 percent deduction for certain pass‐​through business income, repealed the domestic production activities deduction, and repealed the corporate AMT.

Tax Reforms Candidates Should Consider

The Republican presidential candidates—and every other candidate running for office—need to think critically, not just about how to keep taxes from increasing, but how to make additional fiscally responsible reforms to the U.S. tax code.

Extending the 2017 cuts is estimated to lower revenue by more than $3.3 trillion before accounting for increased economic growth. However, economic growth cannot cover all, or even most, of the lost revenue. Instead, Congress will need to consider reforms to spending programs and special interest tax loopholes if they want to keep taxes from rising.

In addition to making the 2017 law permanent, there are other reforms that candidates should consider:

Individual brackets and tax rates. Continue to lower marginal income tax rates, consolidate tax brackets, and cut the capital gains tax rate.
Child and education subsidies. There are currently six different ways a child might qualify a family for tax benefits and more than twice as many ways the tax code subsidizes higher education. In 2025, these tax subsidies should be simplified, if not outright repealed.
Limit itemized deductions. Limits on the SALT and mortgage deductions moved all but 10 percent of Americans to the simpler, larger standard deduction. Congress should continue to limit itemized deductions, ideally eliminating them entirely.
Create Universal Savings Accounts (USAs). USAs operate like retirement accounts but without restrictions on how you spend the funds. Without withdrawal restrictions, taxpayers save more and get to decide how to spend their savings without dictates from Washington.
Permanent business expensing. Business expensing has already begun to phase out, depressing new investment and exacerbating the already heightened risk of recession. Congress should permanently restore full expensing for R&D and equipment and expand the same treatment to longer‐​lived structures.
Repeal business tax subsidies. Well over a trillion dollars in business tax subsidies should be repealed to offset lower tax rates. These include dozens of tax credits for energy production, housing construction, drug development, research spending, employment, and railroads.
Reject the OECD minimum tax, make other business reforms. The U.S. can opt out of the OECD‐​Biden tax cartel by lowering the corporate tax rate to 15 percent and moving to a fully territorial system that disregards foreign profits and taxes. Additional reforms could equalize the treatment of different types of businesses through corporate integration and rationalizing the treatment of interest in the tax code.

Jennifer Huddleston

One of the great benefits of the internet is how it connects global communities. From its earliest days, people have used the internet to make friends and learn about different experiences around the world. Many have credited the internet and social media in lowering the barriers to speech and providing new opportunities for voices that might have otherwise been oppressed.

The United States has been the birthplace of many of the leading global online platforms, and these companies have expressed a strong commitment to free speech online. What was initially considered a strong feature of the internet is now facing rising pushback both at home and abroad as not all governments support a broad conception of free speech.

While the strength of the First Amendment may allow Americans to think they are insulated from attacks on free speech, especially given the dominance of American platforms, the global nature of the internet means restrictions and changing perceptions of free speech abroad are still likely to impact users and businesses in the United States.

What Might Be Causing a Brussels Effect on Speech?

The Brussels Effect refers to European Union regulations which become the de facto governance norms beyond the borders of the EU. One notable example of this phenomenon is the General Data Protection Regulation (GDPR), which has emerged as the default for data privacy regulation. The potential penalties for violation and the significant expenditures and manhours for compliance with the regulation are likely part of this story. Additionally, the concrete definition of data subject or covered entity also may encourage broader applications. Now, various proposed regulations could have a similar impact on speech, both through formal regulation and more informal influence on online speech.

In the EU, the Digital Services Act, a sister piece of legislation to the Digital Markets Act, updates the legal framework for how companies advertise and report their content, and is likely to have significant impacts on free speech. In its attempts to “protect users,” the DSA bans targeted advertising for online platforms based on personal data, requires transparency by online platforms on recommendation algorithms, and implements a user “flagging” system to combat illegal goods and misinformation online, along with other regulations designed to insulate consumers from harm.

While the DSA may be seeking to limit the impact of “bad” content, it is also likely to impact access to content more generally. The Act gives the European Commission more regulatory oversight through the creation of a European Board for Digital Services to inform and enforce the new rules. Among its requirements are transparency about specific harms. Such a requirement, however, is unlikely to only impact “bad” content and could evolve into a much broader requirement that has a more significant impact on speech. In some cases, these may start out as “optional,” but such a requirement is still likely to be enforced broadly out of concerns for further regulatory scrutiny or involvement. The bill went into effect in November of last year, and full enforcement for the DSA will begin next February.

Even though the United Kingdom has left the European Union, it too has recently considered numerous proposals that would have a significant impact on the future of online speech.

The UK’s Online Safety Bill is legislation with the focus of protecting children online, similar to the many U.S. state‐​level bills and the Kids Online Safety Act presented in this year’s U.S. Congress. However, the OSB has become a catchall for content moderation policy since its first draft in 2021, including provisions that require age checks on pornography sites in the same breath as removing child sexual abuse material (CSAM) from platforms through the usage of “accredited technology.” There are aggressive consequences for failure to comply with the OSB: fines up to 10% of worldwide revenue of the company and the blockage of their service from the United Kingdom market. The bill is in the House of Lords, the Parliament’s upper chamber, and could be passed by the end of this summer at its current pace.

Additionally, the update of the Investigatory Powers Act put forward would require companies to approve new security features before launching them, or even disable certain features. Such a requirement would make encrypted messaging services more vulnerable. As a result, a number of companies, including Apple, have threatened to remove their messaging products from the UK if the proposal goes through as currently drafted. While we often think of encryption as a privacy issue, this tool is critical for the speech of those who may be concerned about their safety and security from their own government, including journalists and activists.

Such changes have been increasing outside of Europe as well. For example, in Latin America, government espionage through spyware and sweeping online speech restrictions violate the right to privacy and freedom of expression of citizens throughout the region.

Human rights groups have uncovered the use of the Israeli spyware Pegasus in three Latin American countries — Mexico, El Salvador, and the Dominican Republic — by government executives to spy on their citizens without their knowledge or consent. Those engaged in investigative journalism and civic activism are targeted in particular by the spyware. In addition to unconstitutional surveillance, the legislative bodies of many governments in the region have passed or are in the process of passing laws which would stifle free speech under the guise of fighting against disinformation or hate speech online. For example, Venezuela’s Law Against Hate (passed unanimously by an illegitimate chamber) squashes online discussion on messaging and social media platforms which were safe havens until the legislation, which cracks down on speech. The bill operates through Maduro loyalists and government technicians who point out social media posts or text messages that “promot[e] national hate” to prosecutors without much definition on what constitutes such hate.

There are many other international examples that could be explored but, in general, a growing amount of regulation around the world risks spillover effects to comply with such laws.

How International Tech Policy Could Impact Americans’ Speech

American companies often bring American values regarding free speech and expression into their policy decisions. However, many companies find it easier to have a single set of standards around issues — such as content moderation — rather than have specific rules for each country of operation. While it is certainly understandable why this may be easier, the reality is many Americans may find changes to their online experiences or their own ability to speak freely online. Additionally, this raises questions of what such shifts may do to the positive ways in which the internet has expanded speech for marginalized users and communities as platforms face an increasing number of challenging regulations.

Attacks on encryption could lessen the security of everyone that uses these services. A “backdoor” that allows law enforcement to scan messages could easily be abused by bad actors to obtain information. Additionally, it could render users more vulnerable to surveillance by adversarial nations like Russia or China and limit the ability of journalists to safely contact those engaged in activism in such countries.

Changes to online speech, however, can also happen in more informal ways. For example, many European and Latin American countries have created laws governing hate speech or harmful content online. Platforms may use such laws to formally govern content in such countries, but they are also likely to further the development of internal policies around such issues as well. While many would applaud platforms for taking down racist, sexist, or antisemitic content, the result of hate speech laws’ interpretation is the take‐​down of much more speech than many would immediately assume. Platforms might remove debates over important but sensitive topics such as the Israel‐​Palestine conflict or transgender athletes in women’s sports because of the way moderation terms might be adapted to avoid violating such laws. The result is a concerning shift in norms around online speech that might favor over‐​moderation over potential risks in legitimate debate.

Additionally, a number of governments have placed informal or formal pressure on online platforms to moderate their users’ content. Again, this can remove certain information or opinions from everyone due to the preferences of a particular government.

There is an extensive history of jawboning over the last half a century in the United States, culminating in the age of social media where it manifests as invisible changes to content moderation policies of platforms. However, this phenomenon is not exclusive to the United States. Authoritarian regimes around the world engage in similar practices to control the kinds of speech that exist online, especially if said speech talks ill of the administration in power. Countries like Turkey and India have ordered social media platforms to take down content or block users in the name of national unity or to maintain a positive national image.

While this jawboning and direct censorship by foreign actors does not carry an obvious effect on the United States, it limits the diversity of sources online and forces platforms to possibly change their content moderation policies to adapt to the threats and regulations of countries that seek to limit freedom of expression. These actions come at the detriment of all social media users.

Conclusion

Americans have trusted that the value of free speech on the internet will be based on an American approach to such principles. A growing number of international laws, however, are creating new challenges for both American companies and users. This certainly does not mean that the United States should seek to change its position and more greatly regulate online speech, but it does mean that, in our increasingly connected age, it is important to be aware of the challenges to free speech around the globe and the consequences such proposals have for both companies and users.

David J. Bier

This updates an earlier post.

Fentanyl overdoses tragically caused tens of thousands of preventable deaths last year. Many politicians who want to end U.S. asylum law claim that immigrants crossing the border illegally are responsible. An NPR‐​Ipsos poll found that 39 percent of Americans and 60 percent of Republicans believe, “Most of the fentanyl entering the U.S. is smuggled in by unauthorized migrants crossing the border illegally.” A more accurate summary is that fentanyl is overwhelmingly smuggled by U.S. citizens, almost entirely for U.S. citizen consumers.

Here are the facts:

Fentanyl smuggling is ultimately funded by U.S. consumers who pay for illicit opioids: nearly 99 percent of whom are U.S. citizens.
In 2022, U.S. citizens were 89 percent of convicted fentanyl drug traffickers—12 times greater than convictions of illegal immigrants for the same offense.
In 2023, 93 percent of fentanyl seizures occurred at legal crossing points or interior vehicle checkpoints, not on illegal migration routes, so U.S. citizens (who are subject to less scrutiny) when crossing legally are the best smugglers.
The location of smuggling makes sense because hard drugs at ports of entry are at least 96 percent less likely to be stopped than people crossing illegally between them.
At most, just 0.009 percent of the people arrested by Border Patrol for crossing illegally possessed any fentanyl whatsoever.
Each individual busted for fentanyl by Border Patrol possessed, on average, half as much fentanyl as each person busted at ports of entry in 2023 (10 versus 20 pounds).
The government exacerbated the problem by banning most legal cross-border traffic in 2020 and 2021, accelerating a switch to fentanyl (the easiest-to-conceal drug).
During the travel restrictions, fentanyl seizures at ports quadrupled from fiscal year 2019 to 2021. Fentanyl went from a third of combined heroin and fentanyl seizures to over 90 percent.
Annual deaths from fentanyl nearly doubled from 2019 to 2021 after the government banned most travel (and asylum).

It is monstrous that tens of thousands of people are dying unnecessarily every year from fentanyl. But banning asylum and limiting travel backfired. Reducing deaths requires figuring out the cause, not jumping to blame a group that is not responsible. Instead of attacking immigrants, policymakers should focus on effective solutions that help people at risk of a fentanyl overdose.

U.S. Citizen Consumers Fund Fentanyl Smuggling

U.S. consumer payments for illicit opioids ultimately fund fentanyl smuggling. Consumers pay retail dealers who pay wholesalers, and the cash is then transferred back in bulk cash form to Mexico. These funds are then used to pay smugglers to bring drugs back into the United States again. The best evidence indicates that about 99 percent of U.S. consumers of fentanyl (or products containing fentanyl) are U.S. citizens. Noncitizens appear to be about 80 percent less likely to be fentanyl consumers than their share of the population would predict. Fentanyl smuggling is almost entirely conducted on behalf of U.S. citizen-consumers. Of course, consumers would prefer much safer and legal opioids over illicit fentanyl, but the government has unfortunately forced them into the black market with few safe options.

U.S. Citizens Are Fentanyl Traffickers

Fentanyl is primarily trafficked by U.S. citizens. The U.S. Sentencing Commission publishes data on all federal convictions, which includes demographic information on individuals convicted of fentanyl trafficking. Figure 1 shows the citizenship status of fentanyl traffickers for 2018 to 2022. Every year, U.S. citizens receive the most convictions by far. In 2022, U.S. citizens accounted for 89 percent of fentanyl trafficking convictions compared to just 8.9 percent for illegal immigrants.

Note that since trafficking involves movement from Mexico to the United States, it is unclear how to measure the likelihood of conviction for “noncitizens without U.S. lawful immigration status” since the denominator would include most Mexicans in Mexico as well as anyone who crosses through Mexico. Regardless, the reality is that people with U.S. citizenship or residence traffic the vast majority of fentanyl, not illegal border crossers specifically or illegal immigrants generally.

Indeed, this appears to be the case even for the most high-profile cases. Aaron Reichlin‐​Melnick of the American Immigration Council analyzed every Customs and Border Protection press release mentioning fentanyl over a six‑month period and found just 3 percent involved illegal immigrants. This means that the agency itself believes the most important smugglers are U.S. citizens.

U.S. Citizens Bring Fentanyl Through Legal Crossing Points

That U.S. citizens account for most fentanyl trafficking convictions is not surprising given the location of fentanyl border seizures. In 2023, 93 percent of fentanyl border seizures occurred at legal border crossings and interior vehicle checkpoints (and 91 percent of drug seizures at checkpoints are from U.S. citizens—only 4 percent by “potentially removable” immigrants). In 2022, so far, Border Patrol agents who were not at vehicle checkpoints accounted for just 7 percent of the fentanyl seizures near the border (Figure 2). Of that 7 percent, CBP has testified the majority was seized from vehicle stops, again usually from U.S. citizens. Since it is easier for U.S. citizens to cross legally than noncitizens, it makes sense for fentanyl producers to hire U.S. citizen smugglers.

The DEA reports that criminal organizations “exploit major highway routes for transportation, and the most common method employed involves smuggling illicit drugs through U.S. [ports of entry] in passenger vehicles with concealed compartments or commingled with legitimate goods on tractor-trailers.” Several agencies including CBP, ICE, and DHS intelligence told Congress in May 2022 the same thing: hard drugs come through ports of entry.

Some people posit that less fentanyl is interdicted between ports of entry because it is more difficult to detect there. But the opposite is true: fentanyl is smuggled through official crossing points specifically because it is easier to conceal it on a legal traveler or in legal goods than it is to conceal a person crossing the border illegally. Customs and Border Protection estimates that it caught less than 3 percent of cocaine smuggled at ports of entry in 2021 (the only drug it analyzed), while it estimated that its interdiction effectiveness rate for illegal crossers was about 83 percent in 2021 and 76 percent in 2022 (Figure 3). This means that drugs coming at a port of entry are at least 96 percent less likely to be interdicted than a person coming between ports of entry, and this massive incentive to smuggle through ports would remain even if Border Patrol was far less effective at stopping people crossing illegally than it now estimates that it is.

Closing Ports Increased Fentanyl Smuggling

During the early days of the pandemic, the Trump administration drastically restricted legal travel to the United States, banning nonessential travel through land ports of entry from Mexico in particular in late‐​March 2020. Because there were fewer opportunities to traffic drugs at ports of entry, traffickers switched to trafficking more fentanyl. Because fentanyl is at least 50 times more potent per pound than heroin and other drugs­­, smugglers need fewer trips to supply the same market. The seizure data demonstrate the change in tactics. From October 2018 to February 2020, about a third of fentanyl and heroin seizures at southwest ports of entry were fentanyl with no clear upward trend. By the time the travel restrictions were ended (at least for vaccinated travelers) in January 2022, over 90 percent of heroin‐​fentanyl seizures were fentanyl. Unfortunately, the market shift has continued. The absolute amount of fentanyl being seized quadrupled (Figure 4).

The United Nations Office on Drugs and Crime reported that in mid‐​2020, as a result of travel restrictions, “Many countries have reported drug shortages at the retail level, with reports of heroin shortages in Europe, South‐​West Asia and North America in particular” and that “heroin users may switch to substances such as fentanyl.” The DEA predicted in 2020 that “additional restrictions or limits on travel across the U.S.-Mexico border due to pandemic concerns will likely impact heroin DTOs [drug trafficking organizations], particularly those using couriers or personal vehicles to smuggle heroin into the United States,” leading to “mixing fentanyl into distributed heroin.”

Unsurprisingly, the increased reliance on fentanyl has increased fentanyl deaths. Indeed, it appears that the border closures rapidly accelerated the transition from heroin to fentanyl, leading to tens of thousands of additional deaths per year (Figure 5). The annual number of fentanyl deaths have nearly doubled between 2019 and 2021. Banning asylum under Title 42 of the U.S. code probably had no effect on these trends, but it certainly did not help reduce fentanyl deaths, as some have claimed.

Asylum Seekers Don’t Aid Fentanyl Smuggling

Fentanyl smuggling is not a reason to end asylum. The people arrested by Border Patrol are not smuggling fentanyl. Border Patrol made just 253 seizures of fentanyl for the entire fiscal year 2023. About 37 percent of those were at vehicle checkpoints—which are over 90 percent from U.S. citizens and legal permanent residents—and many other seizures are from U.S. citizens at roving traffic stops in the interior, so likely fewer than 150 of the nearly 1.7 million Border Patrol arrests this year ended in a fentanyl seizure—too small of a percentage (0.009 percent) to appear on a graph. Some people say we can’t know what gets by agents. In a way, that’s true, but we have a massive sample size, and the number of seizures is far too small to affect fentanyl supply in the United States.

Some officials have asserted that asylum seekers distract Border Patrol from drug interdiction efforts. If asylum seekers were indirectly aiding drug smuggling, however, we would expect the effect to show up in the seizure trends by changing the locations, times, or amounts of the seizures in some way. But drug seizure trends simply do not deviate measurably with greater arrests of asylum seekers. This is true on several different metrics: across time, between sectors, along mile‐​distance from the border, or the share of seizures at ports of entry versus between them. If the administration legalized asylum at ports of entry, even this hypothetical problem would disappear.

Aggressive Drug Interdiction Exacerbates Fentanyl Smuggling

The fentanyl problem is a direct consequence of drug prohibition and interdiction. As my colleague Dr. Jeff Singer has written:

Fentanyl’s appearance in the underground drug trade is an excellent example of the “iron law of prohibition:” when alcohol or drugs are prohibited they will tend to get produced in more concentrated forms, because they take up less space and weight in transporting and reap more money when subdivided for sale.

Fentanyl is at least 50 times more powerful per pound than heroin, which means you have to smuggle nearly 50 pounds of heroin to supply the market that a single pound of fentanyl could. This is a massive incentive to smuggle fentanyl, and the more efforts are made to restrict the drug trade, the more fentanyl will be the drug that is smuggled. The DEA has even admitted, “The low cost, high potency, and ease of acquisition of fentanyl may encourage heroin users to switch to the drug should future heroin supplies be disrupted.” In other words, heroin interdiction makes the fentanyl problem worse.

Conclusion

Border enforcement will not stop fentanyl smuggling. Border Patrol’s experience with marijuana smuggling may provide even clearer evidence for this fact. Marijuana is the bulkiest and easiest‐​to‐​detect drug, which is why it was largely trafficked between ports of entry. Despite doubling the Border Patrol and building a border fence in the 2000s in part to combat the trade, the only thing that actually reduced marijuana smuggling was U.S. states legalizing marijuana. It is absurd to believe that interdiction will be more effective against a drug that is orders of magnitude more difficult to detect.

The DEA plainly stated in 2020 that fentanyl “will likely continue to contribute to high numbers of drug overdose deaths in the United States” even with the ban on asylum and travel restrictions. But ending asylum or banning travel has been worse than useless. These policies are both directly and indirectly counterproductive: first directly, by incentivizing more fentanyl smuggling, and then indirectly, by distracting from the true causes of the crisis.

My colleagues have been warning for many years that doubling down on these failed prohibition policies will lead to even worse outcomes, and unfortunately, time has repeatedly proven them correct. The best response to the opioid epidemic is the appropriate treatment of addiction. But for this to be possible, the government must adopt policies that facilitate treatment and reduce the harms from addiction—most importantly, deaths. To develop these policies, policymakers need to ignore the calls to blame foreigners for our problems.

Anastasia P. Boden

150 years ago, the Supreme Court tore a hole through civil rights law when it drastically narrowed the scope of the Fourteenth Amendment. In the Slaughter‐​House Cases, the Court ruled that the Privileges or Immunities Clause protected very few rights from state infringement, including only rights like the freedom to access seaports or to peaceably assemble.

Ever since, scholars, historians, and litigants have tried to persuade the Court to undo its mistake. While they’ve been partially successful in convincing the Court to protect things like freedom of speech and other enumerated rights from state overreach, they’ve been less successful when it comes to economic rights.

This is a huge failure of civil rights law. Historically, occupational regulations have been weaponized against politically powerless groups to keep them from competing. From the Chinese laundry owners in Yick Wo v. Hopkins, to women like Myra Bradwell, who was kept from becoming a lawyer merely because she was a woman, people require economic freedom to thrive. When Courts refuse to protect that freedom, they leave one of our most precious constitutional rights to the whim of the legislature.

Even today, licensure laws and other economic regulations continue to deprive people of opportunity for largely protectionist reasons. Take Ursula Newell‐​Davis, who has been engaged in a multi‐​year battle to open a care business for special needs kids. Louisiana shut her out of the industry solely to ease its workload, which it contends self‐​evidently benefits the public. Federal courts have thus far rejected Ms. Newell-Davis’s claims that the state is depriving her of the right to enter a lawful occupation.

Given courts’ unwillingness to protect the right to earn a living under the Fourteenth Amendment, it’s time to try something new. The Robert A. Levy Center for Constitutional Studies is calling for papers on how to restore economic liberty by looking beyond the Fourteenth Amendment to other parts of the Constitution or sources of law.

I’m copying our call for papers below and I look forward to seeing what you come up with.

Most people would be hard‐​pressed to define the “American Dream” without some reference to economic freedom. From Benjamin Franklin’s dozens of inventions (bifocals! A flexible catheter!), to self‐​made man Frederick Douglass, to serial inventor Joy Mangano’s miracle mop, Americans believe that with a good idea and enough hard work, anyone can enjoy economic success—no matter the circumstances of their birth.

They’d be surprised, then, to learn that courts do very little to protect the right to earn a living. By all accounts, that precious right was intended to be a centerpiece of the Fourteenth Amendment. Yet Federal courts have all but written it out of the Constitution.

Despite vast scholarship by heavy hitters like Bernard Siegan and Randy Barnett and decades of public interest litigation with sympathetic facts, the Supreme Court refuses to consider the right to earn a living a “fundamental” right protected by the Due Process Clause. And apart from a few scattered dissents, the Court appears similarly disinterested in reviving the Fourteenth Amendment’s Privileges or Immunities Clause. Many scholars believe that Clause was drafted with an eye towards protecting economic liberty in particular, but it was (in the words of Akhil Amar) “strangled in its crib” by the Slaughter‐​House Cases. As a result of that 150‐​year‐​old mistake, courts have upheld even the most absurd laws (ie. licensure requirements for florists) in Fourteenth Amendment cases involving plaintiffs left destitute by government overreach.

If we want the judiciary to protect economic freedom, it’s time to try something new.

Are there constitutional theories besides due process and equal protection that could provide more effective protection for economic liberty? The Cato Institute’s Robert A. Levy Center for Constitutional Studies is calling for legal scholarship on legal theories that would protect the freedom to contract, to innovate, to earn a living, and to freely engage in mutually beneficial economic transactions. The Center seeks a mix of papers that are both theoretical and practical; that both suggest new litigation strategies and identify specific policies that seem ripe for legal challenge. The papers will be compiled in a special journal edition produced by the Cato Institute, which can serve as a blueprint for scholars, researchers, and litigants who seek to restore the Constitution’s promise of opportunity through economic freedom.

Examples include:

Evidence of the original meaning of the Contracts Clause and ways it might be reinvigorated through litigation

Potential theories under the Citizenship Clause

State constitutional anti‐​monopoly and anti‐​gift provisions and other causes of action unique to state law or state constitutions

Questions left open by North Carolina Dental Board and ways in which parties can use the Sherman Act to hold regulatory bodies accountable for anti‐​competitive conduct

What’s left of the dormant Commerce Clause after National Pork Producers v. Ross?

Empirical research about licensure creep or theories of how regulatory bodies might be acting ultra vires

Surveys of laws that are particularly ripe for challenge

Lessons learned from the past 20 years of economic liberty litigation

Submission Details: Please submit a brief research proposal that describes a new or underexplored constitutional protection for economic liberty. Proposals should be submitted by November 1, 2023, to Anastasia Boden at aboden@​cato.​org. All proposals will be reviewed on a rolling basis and approvals will allow authors to begin work early.

Honorarium and Other Support:: Authors of accepted papers will receive a $2000 honorarium. Authors will be offered expert feedback on their research, along with peer‐​review and copyediting assistance. Papers will be published as a special journal volume through the Cato Institute. If requested during the initial proposal period or soon thereafter, we also will try to connect potential coauthors with different legal and empirical expertise.

Symposium: Completed drafts are due by March 1, 2024, but need not be in polished or publishable form. Each author will be expected to formally comment on others’ papers. Authors will present their papers at symposium at the Cato Institute in April of 2024. Cato will cover the cost of hotel accommodation and reasonable travel expenses to the symposium.

Contact Information: For questions regarding the call for papers, please contact Anastasia Boden at aboden@​cato.​org

Deadlines:

November 1, 2023: Deadline for submission of paper proposals.

November 21, 2023: Authors notified of acceptance.

March 1, 2023: Deadline for draft papers.

Early April 2024: Presentation of papers at half‐​day symposium at Cato Institute.

Early May 2024: Deadline for revisions and submission of final papers.

Summer 2024: Target for publishing of papers in journal form.

David J. Bier

Customs and Border Protection’s website shows a decline in Border Patrol arrests of convicted criminals in fiscal year 2020 followed by increases in FY 2021 and FY 2022. Many people cite these statistics as evidence that President Biden’s policies have caused a surge in convicted criminals crossing the border. But the 2020 decline never happened. In fact, the spike in criminal arrests started in 2020, and criminal arrests have trended downward under the Biden administration.

More complete CBP data obtained via Freedom of Information Act (FOIA) requests show that CBP’s webpage excludes all criminals arrested under Title 42 (health law). The number of criminals “apprehended” under Title 8 (immigration law) went down in 2020 simply because those people were now being arrested under a different statute, not because they stopped coming. Biden’s policies did not cause a spike in criminal migration. In fact, President Trump’s invocation of Title 42 appears to have caused an increase that escalated to the highest level on record to that point of 2,366 convicts by December 2020.

The daily data show that criminals took a few weeks to realize that Title 42 had brought with it a new paradigm where the probability of criminal prosecution for illegal entry (or reentry) had declined substantially for people with other criminal convictions, but by the summer of 2020, the number of criminals arrested was already substantially higher than previously. In October, the numbers arrested soared to previously unseen highs. December 7, 2020 might be a day that will live in infamy as the all‐​time daily record for criminal arrests.

One reason for the increase might be that Title 42 substantially reduced the likelihood of criminal prosecution for people with prior criminal convictions. The probability that Border Patrol would refer someone with a criminal conviction for further criminal prosecution fell from 60 percent in February 2020 (which was already down from a high of 78 percent in June 2018 to 12 percent in one month. Although prosecutions increased toward the end of 2020, they failed to keep up with the new arrivals. The lack of criminal prosecution came in addition to Title 42’s fast‐​release policy that put people back into Mexico within hours rather than days. Learning about this new dynamic likely led to more attempts to cross illegally by criminals.

President Trump’s immigration policies were not bad for criminal immigrants. His immigration policies backfired and created incentives for criminals to cross illegally. The former president preferred to spend $15 billion on a border wall than to pay to prosecute criminals. In 2018, his administration prioritized prosecuting asylum‐​seeking parents with children over sex offenders and human traffickers. Border Patrol agents said that during family separation, they were being forced into “sending the really bad guys back without prosecution. We are learning after the fact that, for instance, sex offenders were released.”

Despite the uptick, it is important to note that criminals made up just 0.7 percent of Border Patrol’s 2023 arrests. Moreover, although some serious criminals do attempt to enter illegally, nearly half of the convictions reported by CBP were for illegal entry or reentry into the United States. Only 8 percent were for assault, battery, domestic violence, sex offenses, and homicide. Regardless, Border Patrol spends far too much time arresting and detaining peaceful people who otherwise would like to contribute to this country. A better legal immigration policy would let Border Patrol focus on real threats to Americans.

Neal McCluskey

The Biden’s administration’s plan to greatly reduce student loan repayment, as I showed a couple of weeks ago, will be a boon to people who borrowed for undergraduate education. Under current income‐​driven repayment, a borrower with average undergrad‐​only federal student debt and average new graduate earnings would not only fully repay their debt, they would provide taxpayers a small, $216 profit. Under the administration’s much more generous SAVE proposal, in contrast, the borrower would cost taxpayers $6,362.

Undergraduate debt, however, is not the big number for many borrowers. That is grad school debt, which is not capped by Washington as is undergraduate borrowing. Today, I compare current IDR and SAVE repayment for someone with undergrad and graduate school debt.

With graduate debt, the biggest change from undergrad‐​only is the horizon for forgiveness, which changes from 20 to 25 years. Whatever is left after 25 years of qualifying payments is canceled.

For estimates of current IDR and SAVE, I start with approximate first year earnings for a new graduate degree graduate with average graduate degree debt. Because there are many types of graduate degrees—master’s, doctorate, professional school—I use the average salary for an assistant professor (about $83,000) which happens to most closely coincide with average total student debt ($91,460) of someone with a graduate degree in the federal Digest of Education Statistics. That includes undergrad and grad debt. I use a 3.3 percent earnings increase each year, except in the 6th, 11th, and 16th years, when the borrower receives a 5.3 percent raise. I also increase the federal poverty level for a single person, which determines how much income is walled off from repayment, by 3.3 percent each year. (Basically, 3.3. percent is the inflation rate.)

For current IDR, 10 percent of discretionary income (what remains after removing protected income) must be repaid. Discretionary income is everything above 150 percent of the federal poverty line. For SAVE, the share that must be repaid is weighted between 5 and 10 percent, according to the mix of undergraduate and graduate debt, and discretionary income is everything above 225 percent of the poverty line. Using our original $29,719 in undergraduate debt yields $61,741 in grad debt and a 32–68 undergrad‐​grad mix. That puts the share that must be repaid at 8.4 percent. The borrower consolidated undergrad and grad loans, which weights the interest rates for undergraduate (5.5 percent) and graduate (7.05 percent) loans at the same 32–68 mix, yielding an interest rate of 6.6 percent. Any interest left unpaid would be added to the loan under the current IDR, but not SAVE.

The first figure shows what happens under current IDR. The debt is repaid within 14 years, but unlike for undergraduate‐​only debt, taxpayers lose out in present‐​value terms. While in total the borrower will have repaid $99,676, that is only $81,246 in year one dollars—a $10,214 loss for taxpayers.

The second figure is the life of the loan under SAVE. Under this plan, the loan is paid off in under 18 years and the borrower will have repaid $98,346. In year one dollars, that is only $74,542, a $16,918 loss for taxpayers.

Income‐​driven repayment, even now, helps borrowers and is a burden on taxpayers when graduate debt gets factored in. Moving to SAVE will more than double that taxpayer burden.

Alex Nowrasteh

Two major public events made a lasting impression on me as a child. The first was the 1992 Los Angeles riots. We had moved out of Burbank 18 months before, but my mind was still on Burbank and LA generally. I remember watching the riots on TV and listening to adults talk about them, especially those who remembered the 1965 Watts riots and had their own stories of dealing with LAPD officers. The second major event was the 9/11 attacks, which occurred right before my 18th birthday during my senior year in high school. Nobody who watched the towers come down live on the news will forget it.

In the decades since, the country certainly hasn’t forgotten 9/11 – and for good reason. The 9/11 terrorist attacks were the deadliest in world history – by a factor of four or nine, depending on how expansive a definition of terrorism you use. The resulting domestic surveillance, overseas wars, and immigration restrictions have shaped much of politics to this day.

To understand how big a threat terrorism is and the potential hazard some immigrants and other foreign‐​born individuals pose to the United States, the Cato Institute released a new paper today, Terrorism and Immigration: A Risk Analysis, 1975–2022. The report analyzes the number of foreign‐​born terrorists, the murders they committed in their attacks, and other information about them for 1975–2022. This new Cato policy analysis is an update of earlier papers on the topic.

In sum, the report shows that the chance of being killed by a foreign‐​born terrorist in the U.S. is about 1 in 4.3 million per year, a very low‐​probability event. For comparison, the annual chance of being the victim of a regular criminal homicide in the U.S. is 1 in 20,134, a much higher probability.

Terrorism is the threatened or actual use of illegal force and violence by a non‐​state actor to attain a political, economic, religious, or social goal through coercion, fear, or intimidation. It is a specific form of crime that often garners more media and political attention than its impact would seem to deserve. That may be because many Americans vastly exaggerate the scale of terrorism, as some polls suggest. Or it may be due to the nature of the crime, where the unpredictability of terrorism and its motivations are scarier.

Yet another theory says Americans see the victims of terrorism as more worthy of protection than the victims of normal criminal homicide and other crimes, suggesting that the government should do more to prevent those victims from being harmed.

Our analysis shows that between 1975 and 2022 some 219 foreign‐​born terrorists planned, attempted, or carried out attacks that ultimately killed 3,046 people (Table 1). They also injured 17,077 people, with a chance of being injured of about 1 in 774,000 per year (Table 2). For murders committed during terrorist attacks, 98 percent occurred during 9/11. In terms of injuries, 87 percent occurred on 9/11.

Zero Americans were killed in domestic attacks committed by foreign‐​born terrorists in 30 of the 48 examined years. In 29 of the 48 years covered by the new Cato paper, zero Americans were injured in attacks committed by foreign‐​born terrorists. Islamists were responsible for 99.4 percent of the murders in foreign‐​born terrorist attacks and 95 percent of the injuries, followed by a small number of terrorists inspired by right‐​wing ideologies and foreign nationalist ideologies. Zero people were killed by terrorists who entered as illegal immigrants.

The federal government should continue to screen foreign‐​born terrorists from the flow of people seeking to enter the United States, as it should continue to filter out criminals, spies, and other security threats. However, the government should allocate resources to this endeavor using a cost‐​benefit test and not pass broad restrictions on immigrants to allegedly reduce the cost of terrorism. Foreign‐​born terrorism is a hazard to the lives and property of Americans. But it is a hazard that can be addressed by not expending further resources and by cutting some existing ones.

Marc Joffe

According to news reports, at least 111 people have died in the wildfires on Maui, an estimated 1,300 are unaccounted for, and authorities anticipate finding many victims who are children. It is a horrific tragedy and our hearts go out to those who are suffering.

Fortunately, many people are donating food, money, and other goods to the survivors, such as clothing, medicine, and shelter. It’s encouraging to see folks voluntarily, almost instinctively, rally to help their neighbors. While their efforts are to be applauded, actions by the state and county governments merit some scrutiny given news reports of what is happening on‐​scene.

Bear in mind that government action, whether in Maui or under other circumstances, is often justified by the idea of market failure, a condition in which resources are allocated inefficiently because “individual incentives for rational behavior do not lead to rational outcomes for the group.” One set of market failures is public goods (or services), which the market may under‐​produce because potential market actors cannot prevent free riders from benefiting.

An example of a public good is disaster‐​response, like in Maui. As Michel Jarraud, Secretary‐​General of the World Meteorological Organization, told a 2015 UN Conference on Disaster Risk Reduction, disaster early warning systems are “public goods in all countries, without exception, so they must be financed by public investment.”

But as we have seen in Maui, entrusting public goods to the government offers no assurance that they will be provided when needed. Hawaii, for instance, has a decades‐​old system of sirens, including 80 on the island of Maui that are tested monthly. But public safety employees reportedly failed to activate the sirens during the Lahaina wildfire.

Other aspects of the government’s response to the wildfire have come in for criticism. Firefighters initially controlled the blaze but reportedly left the scene before confirming it had been fully extinguished. The government apparently provided insufficient water to fight the fire as it expanded. After the fire, police reportedly prevented residents from returning to their homes to look for relatives, pets, and needed possessions.

Maui resident Allisen Medina told the Daily Mail on Aug. 18, “People have been doing their own recovery. One hundred percent not enough is being done so people are doing it themselves. The government relief organizations – they’re not doing anything.”

“We have the right to know what’s going on,” she added. “FEMA came here to help with the recovery [process] but we don’t see them.” https://​www​.dai​ly​mail​.co​.uk/​n​e​w​s​/​a​r​t​i​c​l​e​-​1​2​4​2​0​8​9​3​/​M​a​u​i​-​w​i​l​d​f​i​r​e​s​-​d​e​a​t​h​-​t​o​l​l​-​u​p​d​a​t​e​.html

Official distribution of relief supplies has been slow. Private groups have taken over much of the task from government agencies that appear to have been left flat‐​footed.

Poor government performance often is blamed on a lack of resources, but that would be a challenging argument to make in Maui’s case. Maui and a couple of adjacent islands are governed by a single county entity that has a 2024 budget of $1.07 billion. With a population of 164,351, Maui County spending this year amounts to over $6500 per resident. Notably, this total does not include public schools that Hawaii funds at the state level. The county mayor’s FY 2024 budget proposal included $60 million for Fire and Public Safety as well as an additional $1.2 million for Emergency Management.

We should be cautious about overgeneralizing from Maui’s case. Government performance varies and there are instances of dedicated public servants coming through for the public in emergencies. Those folks often are real heroes. But what Maui’s case shows is that government intervention does not guarantee the provision of public goods or, indeed, remediation of any form of market failure.

Because humans are imperfect, no institutional arrangement can guarantee a “socially efficient” allocation of resources, even if we could determine what such an outcome should be. Assuming a group of fallible individuals called “the government” will reliably provide public goods could even be counterproductive because it can lead to a sense of complacency.

As the Maui fires illustrate — not unlike Hurricane Katrina in New Orleans — it is wise to take personal precautions or volunteer for neighborhood groups. When disaster strikes, the government may not be there when needed.

Chris Edwards

With Congress scheduled to reauthorize farm subsidies this fall, lawmakers should consider reform lessons from New Zealand. Facing high budget deficits in the 1980s, New Zealand cut government spending, including eliminating nearly all farm subsidies. That was an impressive reform because the country is highly dependent on agriculture. Since then, New Zealand has remained a model of market‐​based farming.

The chart shows producer subsidy levels as a percent of farm receipts, as calculated by the Organisation for Economic Co‐​operation and Development (OECD). New Zealand hands out the least producer subsidies among OECD countries. The United States is below average, but there is room for improvement compared to New Zealand.

The chart is from a 2017 New Zealand government review of agriculture, as are the following quotes.

Prior to reforms in the 1980s, New Zealand provided an array of farm supports, including “minimum prices for agricultural goods, input subsidies, low‐​interest loans, tax incentives and debt write‐​offs.”

As a result, “farmers became less responsive to market signals … and resources were not used efficiently.” Farm productivity decreased “as the support payments provided a secure income without the need to innovate.” A further problem was that “as subsidies were capitalised into land prices, few young farmers could afford to buy land.”

It was clear by the mid‐​1980s that farm subsidies were causing damage. The New Zealand government changed course and ended nearly all subsidies. Its “objectives for reform were to create a level playing field, effectively treating farming like any other business.”

The reforms were successful. After some difficult adjustments during the 1980s, a more efficient agriculture industry emerged in the 1990s. “New Zealand has about the same number of people employed in agriculture today as it did in the pre‐​reform era. Agriculture productivity has quadrupled … There was also an indirect positive impact on the environment.”

Today, New Zealand “does not use export subsidies or trade distorting domestic support for any agricultural product.” Agriculture “is run as any other business; production decisions and market returns are dictated by the domestic and overseas markets. Sales depend on meeting customers’ expectations of price, quality, integrity of the supply chain and sustainability.”

New Zealand debunked the myth that farming cannot prosper without subsidies. The reforms led to the agriculture “industry being better placed to respond to market demand, in addition to being more competitive, more responsive, and significantly less burdensome on taxpayers.”

The upshot for U.S. policymakers is that rather than rushing through a giant farm subsidy bill this fall, they should explore lessons on free market farming from down under.

More on U.S. farm policy here and more on New Zealand farm reforms here, here, and here. The latest OECD farm subsidy data are here.

Travis Fisher

This is Part Two of a multiple‐​part response to the recent court order issued in the case Held v. Montana. Part One is available here.

As an energy economist, I think the most unfortunate part of the Order in Held v. Montana is that it repeats well‐​known errors in energy system modeling made popular by Stanford Professor Mark Jacobson, who provided testimony in the case. Professor Jacobson has been making bizarre claims for years, and his work has been rejected as unrealistic, even by academics who share his desire to reduce carbon dioxide (CO2) emissions.

For example, in the Proceedings of the National Academy of Sciences (PNAS), a group of 21 academics publicly criticized the methodology and assumptions in Professor Jacobson’s work on a hypothetical 100 percent “wind, water, and solar” energy system (WWS). The authors found that Jacobson’s work “used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions.” Authors warned: “Policymakers should treat with caution any visions of a rapid, reliable, and low‐​cost transition to entire energy systems that relies almost exclusively on wind, solar, and hydroelectric power.” (Note: Professor Jacobson initially sued the academics for challenging his work, but later dropped the suit.)

The counterpoint to Jacobson’s work by the PNAS authors is interesting context but doesn’t address the specific claims in the Order. And although a full rebuttal of Jacobson’s work is beyond the scope of this piece, let’s spot‐​check a few of the Order’s assertions—based on Jacobson’s testimony—to see if they stand up to scrutiny. (I also encourage readers to jump to paragraph 269 in the Order and read for yourself Professor Jacobson’s contributions to the case, which the judge deemed “informative and credible.”)

Paragraph 271 reads: “Non‐​fossil fuel‐​based energy systems across all sectors, including electricity, transportation, heating/​cooling, and industry, are currently economically feasible and technically available to employ in Montana. Experts have already prepared a roadmap for the transition… to a 100% renewable portfolio by 2050, which, in addition to direct climate benefits, will create jobs, reduce air pollution, and save lives and costs associated with air pollution” (emphasis added).

Using the kinetic energy of the wind to generate electricity has been technically available in the U.S. since at least 1888 when Charles Brush powered his home near Cleveland using a dynamo connected to a windmill and backed up by batteries in his basement. So I take no issue with the assertion of technical availability, especially if we’re only discussing one state (although a national or global shift to WWS would raise important questions about the availability of critical minerals at sufficient quantities and reasonable prices). However, the concept of a 100 percent WWS system being economically feasible needs a closer look.

Paragraph 276 offers the patently false assertion that: “Wind, water, and solar are the cheapest and most efficient form of energy. Cost per unit of energy in a 100% WWS system in Montana would be about 15% lower than a business‐​as‐​usual case by 2050, even including increased costs for energy storage.”

Policymakers should not be tricked into thinking a WWS future would be inexpensive. We have real‐​world examples of states and nations that have tried to make the transition Professor Jacobson imagines—specifically California and Germany, who have both made an expensive mess of their attempts to decarbonize. For one thing, they have yet to fully decarbonize after many years of effort, as Professor Jacobson claims is feasible. For another, the accumulated costs are staggering: an estimated $580 billion in Germany by 2025. Regarding California’s transition, proponents say decarbonization would take “about $76 billion per year on average between 2021 – 2030.” Specifics aside, it is incorrect and irresponsible to claim a WWS future would be cheap. On a national level, estimates of green energy spending included in the Inflation Reduction Act reach as high as $2.7 trillion. This doesn’t mean that such a transition couldn’t conceivably pass a cost‐​benefit test, but the costs are much higher than Jacobson claims.

Paragraph 276 continues: “New wind and solar are the lowest cost forms of new electric power in the United States, on the order of about half the cost of natural gas and even cheaper compared to coal.”

This is a reference to the Levelized Cost of Energy (LCOE). The National Renewable Energy Laboratory explains that LCOE is “an economic assessment of the cost of the energy‐​generating system including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, cost of capital.” LCOE should not be used to compare intermittent energy sources to on‐​demand sources. The U.S. Energy Information Administration states: “direct comparisons of cost between dispatchable and resource‐​constrained technologies may not be meaningful in most contexts.”

However, perhaps the most‐​cited LCOE research firm—Lazard—attempted to remedy the “dispatchable vs. non‐​dispatchable” problem in its 2023 assessment. Slide 8 in Lazard’s 2023 report illustrates the cost of “firming” intermittent sources of energy.[1] Notably, under the Lazard methodology, the cost of firming increases as the share of intermittent energy goes up. For example, in California (which already has a high penetration of solar energy), the LCOE of firmed solar is $141 per megawatt-hour—compare that to the cost of running existing power plants like nuclear ($31), coal ($52), and combined cycle natural gas ($62). Even for new power plants, the LCOE for combined cycle natural gas ($39-$101) is competitive with the intermittent output of wind ($24-$75) and solar ($24-$96).

Paragraph 281 states: “Transitioning to WWS will keep Montana’s lights on while saving money, lives, and cleaning up the air and environment…” (emphasis added).

Regarding the power grid reliability impacts of a forced transition to intermittent resources, see pages 22–25 of my recent comments on the power plant regulations proposed this year by the Environmental Protection Agency. The short version is this: the reliability of the electric grid is a matter of public health and safety (over 200 people died during extended power outages in Texas during Winter Storm Uri), and efforts to protect people from the risks of climate change have so far ignored the health risks of an unreliable electricity supply.

Conclusion

Energy and environmental policy is too important to allow serious errors to go unchallenged. Policymakers and judges should carefully parse the facts to guarantee that energy and environmental policy is grounded in reality. Unfortunately, the court Order makes several errors on its way to concluding that Montana should turn away from fossil fuels and embrace a WWS energy system. I certainly want a “clean and healthful environment” for my own children. Where advocates and policymakers (and judges) may differ is on which facts are relevant to policymaking and the right policies to promote a clean and healthful future.